Fuel Stocks (Hansard, 10 December 1973)

§ 1. Mr. William Hamilton
asked the Secretary of State for Trade and Industry what are his present plans relating to the introduction of the rationing of oil and petrol.

§ 4. Mr. Marten
asked the Secretary of State for Trade and Industry if he will make a statement on the present position of fuel stocks and on fuel rationing.

§ 41. Mr. Leadbitter
asked the Secretary of State for Trade and Industry if he will make a further statement on oil reserves and the need for rationing.

§ The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Peter Walker)
As I told the House on 5th December, our reserve position does not suggest that the Government should now take action to ration petrol. That remains the position and we shall continue to watch the situation closely.

§ Mr. Hamilton
Is the right hon. Gentleman aware that the Sunday Press was almost unanimous in its criticism that the Government are being dishonest about the facts? Is not the position very much altered by the statement from Kuwait yesterday? Does not this statement mean that there will be an effective reduction of 30 per cent. in our supplies? Will the right hon. Gentleman indicate whether the Prime Minister has yet had a reply to his letter to the Arabs seeking an assurance that supplies to this country will be kept up in January, and subsequently?

§ Mr. Walker
As far as the comments of the Sunday Press are concerned, I note from the hon. Gentleman that whenever the Sunday Press is unanimous on a topic in future he will be in agreement 3 with it. Regarding Kuwait, we have received important assurances from certain oil producers. There is no reason to suppose that the latest announcement affects this assurance in any way.

§ Mr. Marten
In order to clear up misunderstandings, will my right hon. Friend tell the House whether we are exporting from these shores any coal or refined oil products to any country whatsoever? If we are, to which countries are these exports being made?

§ Mr. Walker
Importing and exporting refined products is taking place involving a whole range of nations. For example, we provide most of the refining capacity for Southern Ireland. We import a whole range of products from European countries and export a whole range of products to those countries. These exports involve tiny quantities of coal. If these exports, which involve only a minor figure, did not take place it would mean that contracts entered into by the National Coal Board would be broken. I have control over exports of oil, and the oil companies make weekly declarations of their intentions.

§ Mr. Leadbitter
Is the right hon. Gentleman aware of the deep anxiety among hon. Members on both sides of the House and the deep frustration in the country regarding the haphazard way in which distribution of fuel is being dealt with? Is he further aware that in some areas this type of distribution of fuel is causing frustration of a critical kind? Will he not at least say that the facts should be brought to the House by way of a statement this week, and will he consult the Leader of the House about the order of this week's business and express a personal view that a debate this evening on the landscaping of New Palace Yard—

§ Mr. Speaker
Order. We shall come to the debate on New Palace Yard later.

§ Mr. Walker
The question of business is for the Leader of the House.

§ Mr. Skeet
Will my right hon. Friend tell the House whether there is sufficient fuel oil to deal with the CEGB and the chemical industry? Will he give an indication of the naphtha position? Can 4 he estimate what will be the world price of crude oil and what price the United Kingdom will have to pay?

§ Mr. Walker
The situation in terms of fuel oil provides ground for most anxiety, partly due to the CEGB's decision to make oil reductions. The total position on fuel oil is worse than on almost every other product. The stock situation is such that, provided we can continue the present cuts in the CEGB, these will enable us to continue at the present level. The naphtha situation can be changed dramatically by one major import. Recently a substantial import came from the Gulf which eased the situation, but there is one aspect of naphtha which is causing me some concern, and that is its use in the gas industry.

§ Mr. Benn
Does the right hon. Gentleman realise that it is not merely the Press and Members of Parliament who are critical of him? There is also evidence that the CBI and trade unions feel that he is not being candid and is not telling people the facts. All we are seeking is more information from him. Can he say, for example, what degree of control he exercises over the oil companies? Can he say something about the responsibility for controlling the price of petrol, especially as the Price Commission now appears to contradict itself daily, and as in any case the Fuel and Electricity (Control) Act has given back the power of control to the Minister? Will the right hon. Gentleman also share with the House, industry and the public his assessment of the short-term and mid-term economic prospects?

§ Mr. Walker
No one will expect me to reply to all those questions. The last one alone is a subject for a major speech. The right hon. Gentleman is correct, however, in saying that I nave taken powers which enable me to control the price at both retail and distribution levels. The matter of price control and the manner in which it will be exercised is being examined urgently by the Government in talks with the oil companies. The Price Commission has issued a statement today making its position clear. One of its members made a broadcast in the course of which he made a mistake in saying what the powers were. As for the public feeling of uncertainty about 5 the position and the suggestion of a lack of candour, this is a situation which is complicated and which varies virtually from day to day. In such a situation it is understandable that people regret that there is not some easy graph or set of statistics telling the whole story.

§ Mr. Evelyn King
Although I understand my right hon. Friend's difficulties, will he bear in mind the special position of the tourist industry, upon which places such as Dorset largely depend, as my own constituents do? Will my right hon. Friend bear in mind also that bookings for the future are being made now, and that the economy of the country may depend on them? It is clear that the Opposition do not understand the seriousness of the situation for holiday areas. Will my right hon. Friend consider the possibility of making a special holiday allocation or any other alleviation of the position which may be thought possible?

§ Mr. Walker
In his speech on Friday, my hon. Friend the Minister for Industry made it clear that in certain conditions the whole of industry is substantially threatened by the energy situation. This is a situation in which all industries, including the tourist industry, will suffer.

§ Mr. Cledwyn Hughes
Is the Secretary of State aware that the position in many areas is far more serious than he appears to appreciate? Is he aware that many farmers are suffering considerable difficulties at present? Is he aware also that working to a formula based on last year's supplies does not cover new entrants to the agriculture industry, those farmers who have moved from one area to another in the past year, or those who have expanded their activities in response to Government exhortations? Is the right hon. Gentleman aware, finally, that smaller distributors who normally receive supplies from American-owned companies are running out of supplies, with serious consequences to their customers? Will the right hon. Gentleman look at these problems as a matter of urgency?

§ Mr. Walker
These are problems which are bound to occur when an across-the-board cut is suddenly imposed. I want to pay tribute to the civil servants in my Department who, together with certain divisions of the oil companies, have dealt with hundreds of such problems 6 effectively in the past few weeks. If the right hon. Gentleman knows of specific cases and will let me have details, I shall see that they are tackled straight away.

§ 9. Mr. Adam Butler
asked the Secretary of State for Trade and Industry what is the current level of usable oil stocks in the United Kingdom; and how this compares with one week earlier.

§ 10. Mr. Biffen
asked the Secretary of State for Trade and Industry if he will make a statement on the latest situation regarding the price, supply, consumption and stocks of oil.

§ 13. Mr. Sydney Chapman
asked the Secretary of State for Trade and Industry if he will make a statement on the latest situation with regard to oil supplies within and on the way to the United Kingdom, with particular reference to the distribution of petrol supplies throughout the country.

§ Mr. Peter Walker
Deliveries of crude oil to the United Kingdom last month were much as expected before the crisis. This month the oil companies expect a shortfall of about 15 per cent. and a reduction in imports of oil products. To meet the expected situation, deliveries to users have, in general, been reduced by 10 per cent. compared with last year, and other economy measures have been introduced. Stocks overall remain reasonably satisfactory so far. Prices of petroleum products must inevitably rise in the near future, following the big increases in crude oil prices imposed by the oil producers in October.

§ Mr. Butler
Will my right hon. Friend be a little more precise about the level of stocks? Is he aware that my Question referred to the extent of usable stocks as well? Will he give an answer on that point? Will he give a more precise indication of the current level of stocks?

§ Mr. Walker
It is difficult to give an answer about usable stocks, because the only figures that I have are of stocks held by the oil companies. The extent to which some of those stocks have declined in certain areas may mean that there are now stocks in industry as opposed to the oil companies. I can obtain no accurate figures, day by day or week by week, of stocks held by firms 7 and industry throughout the country. Overall, the current stock trend has been in line with the seasonal fluctuation that would be normal at this time of the year with comparable shifts in stocks from the oil companies to people's petrol tanks and to individual firms.

§ Mr. Palmer
Will the right hon. Gentleman tell the House how many power stations previously burning coal are now being converted to oil? Will he supply the House with the list of such stations?

§ Mr. Walker
shall do so, but I cannot at the present time.

§ Mr. Biffen
Does it presently remain the view of my right hon. Friend that supplies and consumption of stocks of fuel oil and naphtha are sufficient both immediately and in prospect to sustain the Government's growth target of 3½ per cent., or has he joined the growing army of economic realists, among whom I include myself, who believe otherwise?

§ Mr. Walker
I know that my hon. Friend has always included himself in that category. Growth depends on future events that even my hon. Friend, with the realism that he brings to the subject, cannot accurately predict.

§ Mr. Atkinson
Does the right hon. Gentleman agree that the situation must inevitably get worse? If so, is it not criminally incompetent of the Government not to use the powers that the Minister admits he now has to control the prices of all petroleum products? Has not the time now arrived for him to introduce some rationing to avoid what is becoming a racket throughout the distributive trade?

§ Mr. Walker
As I said last week, the introduction of rationing does not prevent rackets. Previous rationing schemes illustrate that there are plenty of rackets.
Regarding the control of prices, I obtained these powers only last Friday and Saturday. At the moment we do not know the full effect of current price increases and the current price-effectiveness of crude oil. I assure the hon. Gentleman that I shall use my powers to ensure that no profiteering is made out of the present situation.

§ Mr. Chapman
If it is true that, generally speaking, there are adequate supplies of petrol in the country and that the problem is aggravated by panic-stricken motorists topping up at every opportunity, would not the answer be that, instead of most garages refusing to give more than £1 worth of petrol, my right hon. Friend should insist that they give not less than £2 worth, or five gallons, with the obvious exception of small tank capacity vehicles?

§ Mr. Walker
I do not think that we could make that kind of approach by Government regulation and impose it on everybody in the country. Some garages have endeavoured to use that method to frighten off people who were just topping up. The position throughout the country, checked at lunchtime today, is very different and much improved compared with a week ago.

§ Mr. Sheldon
Is it not clear, in view of the price of oil to which the right hon. Gentleman referred, that the price of coal is extraordinarily competitive and that the Government are, for the first time within the last 20 years, able to pay the miners a considerable increase because the production of coal is so profitable at the present time? Why do not the Government stop this nonsense which arises from phase 3, get down to realities and pay the miners what they ought to be paid?

§ Mr. Walker
It is partly because of that situation that the Government decided, 12 months ago, to introduce the Coal Industry Act and are now offering the miners a substantial increase.

§ Mr. Warren
Will my right hon. Friend say how much usable oil is being exported from this country? Will he conduct an investigation into the distribution practices of oil companies, which seem to be supplying less oil than they have received?

§ Mr. Walker
If my hon. Friend has any evidence of that, I shall be grateful if he will let me have it. In the earlier stages there was a period of uncertainty as to future allocation, when a number of distributors decided to keep their stocks for themselves. With regard to comments on the M6 and the non-availability of diesel oil, there is plenty of 9 diesel oil on the M6, but it was not being sold, perhaps for that sort of reason. But the position has now substantially improved. As for exports, as a Department we are keeping a daily check with the oil companies on the various forms of oil exports, and there are considerable oil imports too.

§ Mrs. Shirley Williams
If the right hon. Gentleman is refusing to introduce rationing, will he indicate that certain groups in the community should be given priority? I refer, for example, to users of diesel oil for taking children to school and workmen to work, as well as members of the medical profession who find it wasteful of their time to queue. Will he give an assurance that the price which has been bandied about, of possibly 50p for a gallon of oil, will not be charged unless it is justified?

§ Mr. Walker
I can tell the hon. Lady that there will be price increases due to a world-wide increase in the cost of crude oil. These will be regulated so that profiteering will not take place.
Last week we received many complaints about the difficulties of doctors. Through the oil companies and our regional offices we are endeavouring to tackle these cases. Where complaints have been made they have been dealt with.